Appeals Court Reins in Christie's Push to Reorganize State Agencies

Court's sharp rebuke of governor's plan to shut down fair housing agency could have wide implications.

An appeals court has checked Gov. Chris Christie's drive to unilaterally remake New Jersey government -- without legislative approval.

The Thursday ruling, which spoke specifically to Christie's elimination of the Council on Affordable Housing, is expected to have wider implications, particularly in the controversial plan to reorganize Rutgers University.

"While the framers of our Constitution intended to create a strong executive in the office of Governor (perhaps the strongest in the United States), they also recognized the need to insulate functions and agencies from executive control," wrote Judge Philip Carchman for the court.

"The governor exceeded his authority under the Reorganization Act in abolishing COAH," Carchman continued.

The ruling should pave the way for the restoral of the 12-member body first created by the Fair Housing Act in 1985 to ensure that municipalities meet their constitutionally obligated share of affordable housing as decreed by the state Supreme Court in its Mount Laurel decisions.

The Christie administration has vowed to appeal.

"We are obviously disappointed with the court decision, which only perpetuates the nightmare New Jersey has endured for decades with the COAH bureaucracy," said Christie spokesman Michael Drewniak.

"The administration will appeal the decision to the Supreme Court and remains committed to Gov. Christie's original pledge to abolish COAH, a pledge that has bi-partisan support and the support of local leaders across New Jersey."

The decision noted that Christie's reorganization plan followed the legislature's passage of a bill eliminating COAH in January 2011. But lawmakers did not concur with the terms of the governor's conditional veto, and the bill's sponsors withdrew it.

Christie had tried to block COAH early in his administration via executive order but backed off when the appellate division stayed that part of his order.

"The issue in this case is not whether COAH should or should not be an active participant in developing and implementing policies for affordable housing in New Jersey," Carchman wrote.

"We conclude that the power to abolish COAH rests exclusively with the legislature," he stated.

The ruling buoyed faculty at Rutgers-Camden who oppose a proposal -- expected to be embodied in an executive reorganization plan -- that would merge the campus with Rowan University.

Allan Stein, a professor at the Camden law school, interpreted the ruling broadly, saying the court's statements that the governor cannot reorganize agencies that are "in but not of" the executive branch would apply to the proposed reorganization.

"I think it's pretty clear there's no way the governor could implement the Rutgers-Rowan merger after that decision," said Stein, president of the Campaign to Save Rutgers Camden. "We are not even in the executive branch . . . The court said, 'You can't reorganize an entity you don't have operational authority over.'"

While not addressing the higher education plan, Kevin D. Walsh, associate director of the Fair Share Housing Center, said the court's "strong rejection of what the governor tried to do" will protect the independence of numerous other state agencies, including the Election Law Enforcement Commission and State Ethics Commission.

The housing center brought the challenge against Christie's COAH plan.
"The Governor's role under the constitution is to enforce the laws, not to make them," said Walsh. "Gov. Christie simply does not have the power to unilaterally abolish independent agencies he doesn't like."

He said the decision reinstates the housing council, along with its authority over municipal housing quotas. Christie's reorganization plan of June 29, 2011, had transferred those duties to the commissioner of the Department of Community Affairs effective August 28. Fair Share Housing immediately appealed and the Appellate Division of Superior Court accelerated the case. Its ruling comes just three weeks after oral arguments.

But Richard Hoff of Bisgaier Hoff, a land-use law firm in Haddonfield, said the decision did nothing to clarify affordable housing rules in the state.

For decades, COAH used a complex formula to calculate low- and moderate-income housing obligations for communities. Several years ago, COAH abandoned that process, choosing instead a system that tied affordable housing to future growth.

Fair Share Housing appealed that change and the appellate division agreed, telling COAH to go back to its old formula. The Supreme Court stayed that ruling in January 2011 but has yet to even hear arguments in the case. It is one of the oldest cases still on the court's docket.

"Despite today's decision of the Appellate Division, affordable housing in the State of New Jersey remains very much in flux as the Supreme Court is currently considering the legitimacy of COAH's regulations and, with them, the manner in which affordable housing obligations are calculated," Hoff said.

"The decision does little to clarify the very unsettled affordable housing landscape," Hoff added.

New Jersey's municipalities may not have liked COAH, but they also loathe the uncertainty that these legal battles have caused.

"The need for housing reform is paramount," said Bill Dressel, executive director of the New Jersey State League of Municipalities. "When legislative efforts reached an impasse, the governor reasonably sought to use his powers under the Reorganization Act. The reversal by the court does not obscure the need for reform. The only issue is what shape the reform will take."

Sen. Raymond Lesniak (D-Union), the sponsor of the affordable housing reform legislation that Christie vetoed in January 2011, said he plans to reintroduce his bill and try to create a workable process for creating homes for low- and moderate-income residents.

"In order to develop a plan which will stand the test of court scrutiny, we have to work together to create an alternative to COAH that actually works," Lesniak said. "We cannot simply throw COAH out the window without first developing a mechanism which seriously addresses the shortage of affordable housing opportunities."

Lesniak's bill had sought to eliminate COAH, replacing it with a modified growth-share system in which 10 percent of residential units in most new housing developments would have to be affordable. The measure went through substantial amendments in the Assembly, absolving some towns with large numbers of needy children of any additional obligation.

In conditionally vetoing the bill, Christie said it was in some ways worse than the former COAH process.

Lesniak said his Foreclosure to Affordable Housing Transformation Act, which passed the Senate Budget and Appropriations Committee on Thursday, would help municipalities provide more affordable housing by creating a state agency to buy up foreclosed properties and turn some into low- and moderate-income units.

But he said that effort will not be enough. Lawmakers will have to work with Christie to fashion a new affordable housing system that will be "beyond judicial reproach."

Staci Berger, director of policy and advocacy with the Housing and Community Development Network of New Jersey, said the organization hopes the appellate ruling will advance the process of providing housing for low-income and special-needs residents. The Network, along with two other advocacy groups, filed amicus briefs in the case.

"New Jersey can, and must, act to improve and stabilize its housing affordability and variety across the state," she said. "We hope the court's strong rebuke to the governor's COAH plan will encourage him to rethink his attempt to usurp $300 million in municipal housing trust funds and federal foreclosure resources to balance the budget and use that money for its intended purpose."

The 2013 budget proposal seeks to use $200 million from Municipal Affordable Housing Trust Funds for a dozen purposes, including state rental assistance and homeless prevention programs and services for senior citizens, veterans, and the developmentally disabled.

By law, the state can take local trust fund dollars that have not been budgeted or spent within four years, beginning this July. Because of the court actions involving COAH, many communities have not spent their funds.

Walsh said the law makes COAH responsible for the expenditure of the funds and the invalidation of Christie's reorganization plan means the administration will not be able to unilaterally budget those local funds for other purposes.

"They are going to have to have a meeting," said Walsh, noting the council used to meet monthly. "At some point, the towns are going to need help, developers are going to need help."